Inside Track: Delivering from the cloud
With more and more enterprise applications moving to the cloud, remotely-delivered services are becoming the new norm. Where once security concerns stopped all but the most adventurous and forward-thinking from handing their applications over to a third party, that is no longer the case.
In fact, so settled does this issue seem to be that you could be forgiven for thinking all concerns over this practice are a thing of the past, and that doing things any other way would be a waste of time and resources. But are there places the cloud cannot or perhaps even should not reach?
“It’s a good question. I don’t know if I’d use the word ‘shouldn’t’, it’s probably more a case of ‘can’t’ for a number of different reasons,” said Christian Reilly, vice president and chief technical officer of the Workspace Services Division at Citrix.
“With enterprise IT environments, there are lots of things that are difficult to move to the cloud. For example, sometimes there are regulatory reasons why a piece of technology has to remain on site. There can be reasons related to data sovereignty, and there can be reasons related to the fact that some legacy systems are just not compatible and won’t perform. They’ll just bring too much risk if you try to move them.”
The reality, according to Reilly, is that many companies, particularly well-established larger enterprises, deal with a mix of new and old technology and will do for some time to come. While they may use remotely delivered services for some or even most of their needs, they likely also have legacy systems from which they continue to derive value.
“The plain fact is that customers will be operating in a hybrid cloud situation for a very, very long time. That’s partly because they’re using new applications or new infrastructure delivered using the X-as-a-service model for the next generation of their business, yet at the same time they are having to deal with 20, 30, 40 or even 50 years of technology that really isn’t that easy to replace,” he said.
“In still other cases, companies find it hard to find a cloud offering or service that provides everything that they need to be compliant and that’s a relatively common thing that we come across in customers.”
According to Reilly, a surprising number of large enterprises still rely on mainframe technology and adopt the attitude that if it is not broken, do not fix it.
“They have their practical reasons for doing things the way they do them, and we just like to ring fence this by saying there is a better approach and the most common approach that we see is that customers choose the right cloud, at the right time, for the right reason and for the right workload,” he said.
In the opinion of Lorcan Cunningham, chief technology officer with Savenet, many companies have made mistakes in their initial interactions with cloud providers as they failed to measure their billing requirements properly. In short, it cost more than they thought it would.
“Some of our customers have had the misfortune of going into the cloud blindly early on and having to do a mass retreat when the bills start to get out of control. One high profile customer just basically picked up all their servers, plonked them into Amazon and learned very quickly that the cost of doing that was extremely prohibitive and they had to retreat,” he said.
“Moving to the cloud properly involves embracing a completely different mentality because now you’re getting charged for every CPU cycle, every gigabyte of information that you store in there, every virtual machine has an instance fee and you have to pay to back it all up.”
That you need to do things the right way should now be obvious. There are often providers out there that offer the services companies need for a lot less than it would cost to try to provision them from scratch. For example, rather than picking up a whole Exchange environment and putting it into the cloud, it could be more cost effective to go to Office 365.
“Likewise, rather than moving the whole customer relationship management (CRM) system you’re currently using and putting that into the Cloud, moving to Salesforce or SugarCRM might make more sense. There are very few limitations on the software-as-a-service model except when you add up all the licence fees for every single user that’s going to be using all these applications, versus running that application on dedicated virtual machines in Amazon,” said Cunningham.
“If you have 20 or 30 users in the SaaS model, it could end up being way cheaper but if you have 5,000 users the SaaS model could end up being much more expensive than moving your existing CRM system into the cloud using an infrastructure as a service model. It’s about budgeting and planning properly.”
“Blindly going to SaaS or blindly going infrastructure as a service is the mistake—it comes down to what better fits your cost model.”
Meanwhile, the cloud business as a whole seems to be thriving. IDC said that cloud as an IT sector is going to grow 12 times faster than any other IT sector and will be worth €33 billion in Europe by 2019.
Of this market, one of the segments set to benefit the most is CRM and according to Carl Dempsey, vice president of solution engineering for CRM specialist Salesforce, his company is growing faster than the market and the market’s growing fast.
“A lot of people thought that CRM as a market segment wouldn’t really grow anymore but what’s happened is that Salesforce has managed to increase its market by normalising the idea that you have to treat your customers well. It doesn’t matter if you’re one of the largest enterprises in the world or if you’re a tiny start up, you need to give a great customer experience,” he said.
“The world has woken up to the idea that there’s serious competitive advantage in understanding and knowing your customer, and CRM is key to that in an increasingly connected world.”
Dempsey argues that there was an idea that the cloud was not a fit delivery mechanism for some industries or some sectors 10 years ago, but times have changed.
“I’ve been with Salesforce 13 years and that was an argument in the past but in my honest experience, there’s very few industries now where it’s not a fit, if in fact there are any. For example, an Irish customer of ours, Icon Clinical Research, conducts clinical trials for pharmaceuticals and you’d think that’s one of those areas that would be a no-go,” he said.
“But they’re actually driving their business through our software—sales, marketing and customer services are all done on Salesforce and they’re also now integrating digital platforms to manage the trial process itself.”
“Think of an industry that doesn’t need agility? Think of an industry that doesn’t need to be able to adapt quickly? There aren’t any, but that’s what cloud does. It’s not just about delivering software remotely, it’s actually a fundamentally different way to use technology.”
The cloud drives innovation, argues Dempsey. It drives scale and adaptability and that’s a near universal need. But what about the idea that it’s dangerous to introduce a potential point of failure into your system? That putting line of business applications into the cloud is risky because you’re sacrificing overall control of an important asset to a third party?
“There was a time when the legacy software players were really trying to my spread what we call in the industry FUD—fear, uncertainty and doubt. But today, cloud is probably delivering more mission-critical applications than the classic on-premises methodology,” said Dempsey.
“Take something that’s hot at the moment, like big data. There are very few companies that can actually run the infrastructure to store and analyse the type of data that we’re talking about. Cloud is a better way to do it. Enterprise resource planning (ERP) is the same—there are certain classic vendors in that space that would have poo-pooed cloud.”
“But the market has moved that way and now, if you look on our app exchange, Sage has built a cloud-based ERP solution and there are companies like Rootstock doing it, and Financial Force is running financials in the cloud integrating with Salesforce.”